New York Set to Slash Medicaid Spending for the 2009-10 Fiscal Year

Posted by Jason Greis on December 17, 2008 under Articles | Be the First to Comment |  Print

Governor David Paterson released a budget proposal on December 16, 2008 that would significantly reduce New York’s Medicaid spending, while raising more than $1 billion in assessments on hospitals (including LTACHs), other healthcare providers and health insurers.  A Press Release issued by The Healthcare Education Project (a venture between the Greater New York Hospital Association and SEIU Local 1199) estimated potential Medicaid payment cuts of $1.4 billion dollars to hospitals for the 2009-10 fiscal year.  The proposed budget also seeks to raise more than $1 billion in fees, surcharges and assessments on health care providers and insurers, in part, by imposing a a 0.7 percent assessment on hospital inpatient revenues and creating a new $49 million surcharge on procedures performed by physicians in office-based and urgent care settings.

Many New York LTACHs are heavily reliant on Medicaid reimbursement.  These facilities are also struggling with soaring medical malpractice costs, decreased access to credit, and increasing bad debt loads.  Greater New York Hospital Association President Kenneth Raske responded to the proposed cuts by saying that “[p]roviding New York’s most vulnerable residents with health insurance doesn’t mean much when you also approve cuts that will quite literally destroy hospitals’ ability to care for them . . . [a]nd how can a budget that will force hospitals to slash services, lay off workers, and even shut their doors for good be called a sacrifice . . . no other industry will be impacted so severely [by the State's proposed budget].

Several other states have already proposed, or are considering, significant cuts to Medicaid funding for the coming fiscal year.  For more information about New York’s proposed budget and its impact on healthcare providers, please visit the Greater New York Hospital Association’s website or the Healthcare Association of New York State’s website.

Jason S. Greis 
312.849.8217
jgreis@mcguirewoods.com